tcl communication technology holdings limited · tcl communication technology holdings limited ......
TRANSCRIPT
1
TCL COMMUNICATION TECHNOLOGY
HOLDINGS LIMITED (02618.HK)
2011 Interim Results Presentation
Hong Kong - 8 August 2011
2
The information contained herein should not be utilized for any legal purposes in regards to any investor's
investment decision or results. In particular, this document does not constitute any recommendation or
invitation for subscribing for or sale and purchase of any securities of TCL Communication Technology
Holdings Limited (the "Company"). The Company hereby expressly disclaims any liability for any loss or damage
resulting from or in connection with any reliance by any investor on the information contained herein.
Disclaimer
A number of forward-looking statements may be made during this presentation. Forward-looking statements
are any statements that are not historical facts. These forward-looking statements are based on the current
expectations of the Company and there can be no assurance that such expectations will prove to be correct.
Because forward-looking statements involve risks and uncertainties, the Company‟s actual results could differ
materially from these statements.
3
Agenda
• Financial Highlights • Business Review & Outlook • Q&A Session • Appendix: Company Overview
5
1H 2011 YoY 1H 2010
4,600 33% 3,452
30.3 3% 31.1
22% 1% 21%
391 56% 250
8.5% 1.3% 7.2%
Sales Volume
(„000 Units)
Total ASP (US$)
Net Profit
Revenue & Profit
(HK$ Million)
Revenue
GP%
Financial Highlights
Net Profit%
14,228
19,451
6
14%
17%18%
22% 22% 22%
10%
15%
20%
25%
Y2006 Y2007 Y2008 Y2009 Y2010 1H 2011
Wi-Fi
3G Android
Touch & Qwerty EDGE Social Networking
Entry Multimedia Touch
ULC Full Keyboard SMS Phone
VGA Phone GPRS Messaging Side Slider
Sustainable Gross Margin
Gross Margin
7
14
113
69
181
202
250
180
211
-50
0
50
100
150
200
250
300
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Brand Value & Customer Relationship
Product Competitiveness
Operational Efficiency
Financial & Pricing Strategy
Economies of Scale
Sustainable Strong Profitability
Net Profit
(HK$ Million)
8
(HK$ Million)
30 June 2011
31 December 2010
Change
Non-current assets 1,122 635 77%
Current assets
-Inventories 1,093 780 40%
-Trade receivables 1,977 2,535 -22%
-Cash and cash equivalents 1,239 1,345 -8%
-Pledged deposits 6,998 6,201 13%
-Other current assets 1,033 758 36%
Total current assets 12,340 11,619 6%
Current liabilities
-Interest bearing bank and other borrowings (7,348) (6,488) 13%
-Trade and notes payables (1,508) (1,843) -18%
-Other current liabilities (2,065) (1,683) 23%
Total current liabilities (10,921) (10,014) 9%
Net current assets 1,419 1,605 -12%
Total assets less current liabilities 2,541 2,240 13%
Non-current liabilities (31) (18) 72%
Net assets 2,510 2,222 13%
Statement of Financial Position
Financial Position Highlights
9
* Calculated based on the Group‟s total interest-bearing borrowings over total assets, excluding
RMB foreign exchange program
** Excluding RMB foreign exchange program
*** Special dividend
Gearing Ratio * 10% 8%
Current Ratio * * 1.35 1.40
Trade Receivables Turnover Days 76 69
Inventories Turnover Days 51 36
EPS (1H 2011/1H 2010) 35.49 HK cents 23.30 HK cents
Interim Dividend per Share 13.8 HK cents 8 HK cents ***
Dividend Payout Ratio 39% 34%
Key Financial Ratios
30 June 2011 31 December 2010
11
Sustainable Growth in 1H 2011
• Continuing Geographic Expansion
• “Step-up” Product Strategy
• Brand Building in Open Market
• Complementary ODM Strategy
Successful Expansion in Mid- to High-End Market with Strong R&D and Design Capabilities
• In Q2 2011, new models of 3G Android smartphones
successfully launched
• In February and May 2011, Ningbo and Chengdu R&D Centers
were established respectively to enhance in-house R&D
capabilities and accelerate high-end smartphones development
• In March 2011, ONE TOUCH 818 and ONE TOUCH 355 PLAY
won Red Dot Design Awards in Germany
Four Growth
Drivers Leading to
Growth
Momentum
1H 2011 Highlights
• Sales Volume: 19.5 million units, up 37% YoY, on track of sustainable
growth, despite Japan earthquake disruption and weak global
handsets demand in May and June 2011
• Revenue: HK$4.6 billion, up 33% YoY
• Net Profit : HK$391 million, up 56%YoY
• Basic EPS increased to 35.49 HK cents from 23.30 HK cents YoY
12
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
2,276 2,782
4,240
6,825
5,789
8,439
9,504
12,491
8,715
10,736
Stable Growth in Sales Volume
Quarterly Sales Volume of Handsets and Other Products
„000 units
13
Business Review
Europe, Middle East and Africa (“EMEA”)
• Shipment in 1H 2011 totaled 7.3 million units, surged 45% YoY
• Broadened customer base and distribution channels in Russia and
southern part of Africa
• Expanded market penetration into southern part of Africa and CIS countries
• Open market continued to grow in Western European countries with
diversified product portfolio
Americas
• Shipment in 1H 2011 totaled 9.4 million units, significantly up 36% YoY
• Strengthened sales in existing markets such as Brazil (1,265% YoY),
Argentina (287% YoY) and Mexico (78% YoY)
• Successful broaden in open market and distribution channels in Cuba and
Venezuela
• Enhanced product mix featuring mid- to high- end handsets
• Ranked No.4 in Latin America in terms of shipments
+45%
+36%
14
Asia Pacific
• Shipment in 1H 2011 totaled 1.1 million units, up 15% YoY
• Further enhanced its presence in existing markets such as the Philippines,
Vietnam, Singapore and India
• Expansion into new markets such as Bangladesh and lined up with new
operators
• Diversified product mix to strengthen brand image
The PRC
• Shipment in 1H 2011 totaled 1.7 million units, up 27% YoY
• Lined up with 3 operators in the PRC: China Unicom, China Mobile and
China Telecom and launched customized products with popular local content
features and attractive price
• Widened sales network nationwide by cooperating with distributors like
Suning Appliance (“蘇寧電器”) and Zhongyu Telecom (“中域電訊”)
• Strengthened ALCATEL ONE TOUCH Flagship Store place in handset
category in TaoBao Mall (“淘寶商城”) and 360Buy (“京東商城”)
Business Review
+27%
+15%
16
3G Android Products Selected by Global Mainstream Operators and Distributors
3G Android models (e.g. ONE TOUCH 990, ONE TOUCH 908,
ONE TOUCH 980, etc) have been selected by global mainstream
operators and distributors in Americas, EMEA, APAC and China;
new model ONE TOUCH 910 will be launched in 2H 2011
Americas EMEA
The PRC
APAC
17
Smart design Smart experience For Smart users
Powerful & Intuitive
Capacitive touch, gesture control, proximity & light sensor
5.0 Mpxl
3G+
Wi-Fi
3.5”
display
32GB
Capacitive
Touch
G-sensor
AGPS
18
The best of Android experience. Touch - Text - Speed
5 megapixel auto focus & capacitive touch
Android 2.2 - Pre-embedded apps
E-compass
2.8”
Display
G-sensor
3G+
5.0
Megapixel
GPS 32GB
19
Office
E-book
TV
Wi-Fi
7”
display
32GB
Capacitive
Touch
5.0 Mpxl
Slim design Dazzling colourful cover
High resolution visual enjoyment
Android 2.3 perfect experience for smart users
23
Outlook Year of Growth in 2011
Reiterate target sales volume for full year 2011 at 50 million units, up 39% versus 2010 sales volume
Upgrade infrastructure including construction of new production plant to further increase annual production capacity up to 130 million units for future sustainable developments
Continued Efforts in Smartphone Penetration and New Models to Be
Launched in 2H 2011
3G Android models (e.g. ONE TOUCH 990, ONE TOUCH 908, ONE TOUCH 980, etc) have been selected by first tier operators
Expect smooth and shorter validation process for future models and effectively reduce product launch lead time
New model ONE TOUCH 910 will be launched in 2H 2011
Continue to Make Improvement in PRC Market
A series of 3G Android products including tablet will be launched in 2H 2011
Conduct more marketing campaigns for smartphone
Sustained Strong Growth Momentum
Strong growth momentum sustained in existing markets by gaining market share from competitors and successfully entered new markets, e.g. southern part of Africa
Line up with major operators and distributors in Brazil and USA to strengthen Sales in Americas
26
Principal
Business
• Research & Development, manufacturing and global sales of mobile phones and
accessories of two key brands: - “TCL” (in China)
- “ALCATEL ONE TOUCH” (in Europe, Middle East, Africa, Americas, Asia-Pacific and China)
Background
• A member of TCL Corporation (stock code: 000100.SZ)
• Listed on the Hong Kong Stock Exchange in Sep 2004 (stock code: 02618.HK)
TCL COMMUNICATION TECHNOLOGY HOLDINGS LIMITED
(02618.HK)
Public Shareholders
48.2%
TCL Corporation
48.4%
Huizhou City
Investment Holdings
TCL Employee
Committee Public Shareholders Mr. LI Dongsheng
Directors
3.4%
* As at 30 June 2011
Company Overview
27
• A globally-oriented China-based provider of mobile and internet products
• A multi-cultural workforce over 8,900 employees
• Two strong brands: ALCATEL ONE TOUCH internationally and TCL in China
• Seven Product Lines: GSM/WCDMA, CDMA, TD-SCDMA, CMD, Accessory,
Brand Design Lab and MID
ODM
business
One Company Multiple Businesses
28
Shenzhen:
- Headquarter
- R&D Center
Huizhou:
- Global factory
- R&D Center
Shanghai:
- R&D Center Paris:
- Sales Center
Mexico City:
- Sales Center
Ningbo:
- R&D Center
California:
- Sales Center
Chengdu:
- R&D Center
Production
Facilities,
R&D Centers,
Sales Offices
• Headquartered in Shenzhen, China
• Global research facilities located in Shenzhen, Shanghai, Chengdu, Ningbo and Huizhou
• Global factory located in Huizhou, China
• Global presence across over 120 countries and regions
• 115 repair centers, over 50 offices, over 8,900 employees around the world
Global Presence
29
• More than 2,000 highly skilled and experienced
research engineers distributed in Shanghai, Shenzhen,
Chengdu, Ningbo and Huizhou
• Ownership of GSM core technological patents obtained
through acquisition of ALCATEL mobile phone business
• One of the few companies who own 2G, 2.5G, 2.75G,
3G patents in the world, excellent tradition of research
and development
• Able to provide solutions to GSM, GPRS, EDGE,
CDMA, WCDMA, TD-SCDMA independently
• Continue efforts in the development of 3G products,
OMS-based handsets, data cards and multifunctional
phones
• Focus on innovation as well as the high quality of the
products
Strong R&D capability
Durable Flip Testing Abrasion Testing
Electrostatic Testing Durable Press Testing
30
• Production capacity of approximately 65 million
units annually
• World-class SMT production lines and supporting
facilities
• Experience of efficient global logistics
• Strict tests by key telecommunication operators in
the world
• ISO9001 and ISO14001 qualified
• Testing & manufacturing capability for platform TI,
MTK , QUALCOMM & BROADCOM
SMT production line Testing center Main building
Manufacture center in Huizhou, China Highly Efficient Production Facilities
31
Board of Directors
Mr. GUO Aiping
CEO and
Executive Director
Extensive experience in overall
management of multinational
company, strategic planning
and development
Graduated from Stanford
University with Doctor‟s degree
in Management Science
Mr. BO Lianming
Non-executive
Director
Over 10 years of
experience in
consumer
electronics
products industry
With Doctor‟s
degree in
Business
Administration
Mr. HUANG Xubin
Non-executive
Director
Rich
experience in
finance area
With Master‟s
degree in
Economics
and EMBA
degree
Fellow
member of
both HKICPA
and ACCA
With profound
financial and
accounting
expertise
Mr. LAU Siu Ki
Independent
Non-executive
Director
Mr. LOOK Andrew
Independent
Non-executive
Director
Over 20 years'
experience in
equity investment
analysis
Best Hong Kong
Strategist and
Best Analyst by
Asiamoney
Magazine
Ms. XU Fang
Non-executive
Director
Vice President
and Human
Resource
Director of TCL
Corporation
Distinguished
professor at
Shantou
University
Mr. LI Dongsheng
Chairman and
Executive Director
Founder of the Company
“Business Leader of the
Decade” by CCTV in 2009
About 30 years in various
aspects of electronics
industry
Over 19 years experience
of research, development
and management in
electronics industry
With PhD major in
Electrocircuit & System
and MBA degree
Mr. WANG Jiyang
Senior Vice
President and
Executive Director
Prof. Kwok Hai Sing
Independent
Non-executive
Director
Chair Professor
Dept. of Electronic &
Computer
Engineering,
HKUST
Fellow of the Optical
Society of America,
IEEE and Society
for Information
Display
32
Mr. GUO Aiping, George
CEO & Executive Director
• Extensive experience in overall management of multinational company, strategic planning and development
• Graduated from Stanford University with a Doctor‟s degree in Management Science
Mr. WONG Kwok Chung, Albert
Executive Vice President & General Manager of APAC
• 13 years of experience in computers and electronics industry in Hong Kong, Canada and the PRC
• With Bachelor‟s degree in Science and Master‟s degree in Electrical and Electronics Engineering
Mr. Nicolas ZIBELL
Senior Vice President & General Manager of Americas
• Over 20 years of experience in sales, marketing, product strategy and management in automotive and telecommunications industries in Europe and the Americas
• Graduated from École Superieure de Commerce de Lyon and ESADE Business School with MBA degree
Mr. LIU Yuk Tung, Thomas
CFO & Senior Vice President of Business Strategy
• About 25 years of experience in areas of audit, international finance and trading business
• A CPA of HKICPA, Charted Accountant of ICAEW and fellow member of ACCA
• With Bachelor‟s degree major in Economics, MBA and Master‟s degree in Accounting
Mr. WANG Jiyang
Senior Vice President of R&D, General Manager of GSM/WCDMA Production Line & Executive Director
•Over 19 years experience of research, development and management in electronics industry
•With PhD major in Electrocircuit & System and MBA degree
Mr. Yves MOREL
Senior Vice President & General Manager of EMEA
•26 years experience of sales and marketing mainly in telecommunication industries
•Contributed to develop sales area such as Russia, Central Europe, Middle East, Africa and Western Europe
Executive Committee